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ICICI Bank has denied media reports regarding its CEO Chanda Kochhar being asked to go on a indefinite leave by the bank board, till the independent enquiry was on.

In a statement a bank spokesperson said,”The ICICI Bank Board denies having asked Ms. Chanda Kochhar to go on leave. She is on her annual leave which was planned in advance. Further, the Board denies that it has appointed any search committee to find her successor.”

ET in its edition on May 31 had said that the bank’s board is planning to complete the probe while she is on her annual vacation. The fresh probe was ordered by the board of ICICI Bank after a new whistleblower made allegations that CEO Chanda Kochhar violated the bank’s code of conduct, rules on conflict of interest and was part of quid pro quo dealings with certain bank borrowers.

The enquiry will be overseen by the bank’s audit committee and will be headed by an “independent, credible person”.

“At the moment Kochhar is on her annual leave. It has been timed accordingly so that there is no interference and the board doesn’t have to tell her to step aside during the period of investigation,” said one of the persons aware with the development. “These things are completely documented whether she is present or absent does not make any difference, you cannot change these records as they are all computerized.”

People close to the situation said that the board met on May 29 and discussed appointing a law firm and a forensic auditor. The discussions took place after a new complaint by a whistleblower forced the board to change its stance of unequivocal support to Ms Kochhar. MK Sharma, ICICI Bank chairman and audit committee chief and independent director Uday Chitale steered the discussions.

A retired judge is likely to head the probe. He would be assisted by a law firm and an auditor would help in investigating the charges that has worried the board and shareholders. All major firms including Deloitte, PwC, EY, BDO, Alvarez & Marsal and Grant Thornton have separately thrown their hats in the ring for doing the forensic audit but not decision has been taken.

"The bank has still not decided on the terms of reference and the scope of investigations we were told," a forensic investigator in the know said. "The decision would be taken within a week and rules of engagement would be decided only thereafter."

According to another person with direct knowledge of the matter Cyril Amarchand Mangaldas was approached to be part of the investigations, but has refused.

The board’s latest decision comes two months after it reposed full faith in Ms Kochhar and rubbished allegations of impropriety. The development is likely to be unwelcome news for Ms Kochhar who has been maintaining her innocence since the controversial allegations broke out and appears to be an attempt on the part of the board to put an end to the speculation once and for all. The new complaint from the whistleblower appears to have spurred the board into action after weeks of denial.

The development also comes close on the heels of a notice sent by the Securities and Exchange Board of India asking the bank to respond to allegations of violations of disclosure requirements under the securities law in the case involving Videocon Group and NuPower Renewables, a firm run by her husband Deepak Kochhar.

"The scope of enquiry would be comprehensive and include all relevant matters arising out of and in the course of examination of the facts and wherever warranted, use of forensics/email reviews and recordal of statements of relevant personnel etc," ICICI Bank had said on May 30.

ICICI Bank and Kochhar are facing allegations of conflict of interest, unprecedented in a private sector bank – arising out of business dealings between members of the CEO’s family and the Videocon group. Chief Executive Chanda Kochhar has firmly denied all charges of impropriety and quid pro quo including suspicion that she violated disclosure requirements relating to NuPower Renewables’ (her husband’s firm) dealings with Videocon Industries.

The bank’s board backed Ms Kochhar when the allegations surfaced in March but ET in its April 23 edition reported that ICICI Bank chairman MK Sharma conducted a secret, internal inquiry two years ago and found no wrongdoing on the part of Kochhar. The findings were endorsed by leading law firm Cyril Amarchand Mangaldas.

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